The futures are now open and they are 30 points lower. While I am writing this I expect that to change about oh...... every second. But for now I want to talk about what is happening from a technical stand point.
We are trading below the 150 day smooth moving average in every major market and we also had a Dow Theory confirmation telling us that the trend is now bearish. Not good for the bulls. Like I always say "when news and trend coincide you see the biggest moves." That is what we are seeing right now.
So what are traders thinking about going in on Monday morning?
I think that traders want to see a capitulation low made right away so we can see where we are really at. How much lower do we have to go to find buyers? I'm not sure, but I think we are close. Once a short term low is made we can start the talk....was this the correction or are we in a bear market? I don't think that we will know that answer for weeks or even months to come. Once a short term low is put in then we can go back to trading technicals and stop trading off of fear and panic.
"Keep it light and keep it tight" a fellow trader used to say to me. That advice definitely applies in this market. Remember to trade your plan and be able to come back tomorrow. Have a great week trading.
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